Silver 1 OZ 999 NY (XAG=X) outlook hinges on the next move in gold
Last week, gold rallied strongly into a major zone of resistance, measuring from the February peak at 1347 up to the July 2016 high at 1375. The macro-wedge has a top-side trend-line running over from 2014, with several important connecting points making the zone ahead quite formidable.
With that in mind the pullback in gold price to start the week came as no surprise. The question is whether it can garner the strength to push on through the aforementioned levels and spark a lasting macro-breakout that could have gold running for the foreseeable future.
In the near-term there may be more problems. Following the initial pullback we are seeing another push higher this morning that could result in a short-term lower high and a dip below yesterday’s low at 1320. How aggressive sellers become in this scenario will be noteworthy.
A modest pullback or failure to trade below this week’s current low could lead to a consolidation pattern from which gold can attempt to make another break of resistance. However, if sellers show up in earnest soon, then we may again be in the process of the seeing the long-term wedge further tighten up.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 15.09.
The projected lower bound is: 14.37.
The projected closing price is: 14.73.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 19 black candles for a net of 10 white candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 17.9243. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 4 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 50.64. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 17 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 44. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 9 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.035 at 14.735. Volume was -0% below average (neutral) and Bollinger Bands were 8% narrower than normal.
Open High Low Close Volume___
14.710 14.874 14.690 14.735 0
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 14.74 14.80 14.91
Volatility: 17 16 17
Volume: 0 0 0
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 1.2% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bullish on XAG= and have had this outlook for the last 5 periods.
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